Budget deadlock ends as House OKs debt bill

WASHINGTON - A plan to lift the nation's debt limit and reduce government spending cleared a crucial hurdle in the House on Monday night as recalcitrant Republicans and disappointed Democrats rallied around a measure to avert a government default.

With Senate approval all but certain, the 269-161 vote in the House ended a months-long partisan stalemate that threatened to destabilize global markets and undermine the sputtering economic recovery.

The Senate vote is set for noon today. Approval would send the measure to President Barack Obama and immediately grant the Treasury $400 billion in additional borrowing authority, just hours before a midnight deadline.

House Speaker John Boehner, R-Ohio, won over more than two-thirds of his caucus by assuring the lawmakers that few GOP priorities were in the line of fire and that Obama had retreated on his demand for higher taxes.

Angry Democrats largely shared that assessment. But after withholding their votes for most of the roll call, they split evenly for and against the proposal, which would cut at least $2.1 trillion from projected borrowing over the next decade without any immediate provision for new taxes.

A grueling battle that had consumed Congress for most of the spring and the summer ended with a large round of bipartisan applause shortly after 7 p.m., when the legislation secured a majority.

The lawmakers were brought to their feet again by the stunning appearance of Rep. Gabrielle Giffords, D-Ariz., who cast her first vote since she was shot in the head in early January in Tucson. The shooting prompted several weeks of soul searching on Capitol Hill about the hostile partisan rhetoric that often fills congressional debates and campaigns, a brief respite that soon passed as Congress dove into six straight months of warfare over federal budgets.

The debt plan prompted grumbling from some GOP defense hawks about proposed cuts to next year's Pentagon budget. But Monday's final hours were more notable for the cries from House liberals, who charged that the measure gave them little to support. Aside from potential military cuts, Democrats said the agreement calls on Republicans to sacrifice very few priorities, while asking Democrats to accept steep reductions in programs that benefit the middle class.

"It's time for America to deal with its spending problem and deal with the fact that we've made promises to the American people that our kids and grandkids just can't afford," Boehner said at a valedictory news conference.

Just four days after Boehner suffered a humiliating defeat when he could not pass similar legislation solely on GOP votes, the speaker still saw 66 defections from his side of the aisle.

The agreement was sealed late Sunday after weeks of acrimonious debate. If approved by the Senate, it would raise the $14.3 trillion debt limit by at least $2.1 trillion, including the immediate $400 billion released upon Obama's signature. An additional $500 billion would come in the fall, unless two-thirds of both chambers of Congress voted to prevent it. The final increase, which would occur early next year, would provide the Treasury with sufficient borrowing power to pay the bills into early 2013.

The deal also calls for sharp cuts in agency spending - about $900 billion over the next decade, according to congressional budget analysts. The agreement on agency spending next year makes it far less likely that a funding dispute will shut down the government before the 2012 presidential election.

Democrats took comfort in the fact that the cuts were less severe than House Republicans approved in their budget blueprint in April. Compared with the GOP budget, the agreement provides about $44 billion more for domestic programs, including Pell grants for college - and $10 billion less for defense.

Those security cuts created a last-minute issue for Boehner, whose closest allies include the top Republicans on committees that fund the military. But at an emotional Monday morning meeting of Republicans, several longtime GOP lawmakers spoke in support of the plan, aides said.

A second stage of reductions would come later this year, with the appointment of a special committee charged with wringing at least $1.2 trillion more out of the budget over the next decade. If the committee failed to act, or if Congress did not adopt its recommendations, government spending would be cut across the board by the same amount, with the reductions split 50-50 between domestic programs and defense.

House Democratic Minority Leader Nancy Pelosi, D-Calif., emphasized that the "trigger" would exempt programs for the poor, including Medicaid, Social Security, food stamps, and health and nutrition programs for children.

Despite those small Democratic victories, House liberals were furious about the agreement. In an interview with ABC News, Pelosi echoed the comments of Rep. Emanuel Cleaver, D-Mo., a leading member of the Congressional Black Caucus, who called the deal a "Satan sandwich." Pelosi added, "With some Satan fries on the side."